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Nasdaq, S&P 500 hit 5-year highs

US stocks rose with the Nasdaq and S&P 500 indexes closing at 5-year highs, as investors bought tech stocks.

india Updated: Apr 06, 2006 12:31 IST

US stocks rose on Wednesday, with the Nasdaq and S&P 500 indexes closing at 5-year highs, as investors bought tech stocks after Apple Computer Inc released software that could expand the number of users of its Mac computers.

Energy company stocks rose with a jump in US crude oil futures prices above $67 a barrel. An index of oil companies' shares rose nearly 2 per cent.

Apple's shares shot up nearly 10 per cent, their biggest one-day percentage gain since November 2004. Apple's gains increased demand for the shares of other technology companies, including chip maker Intel Corp, whose chips are used in Apple computers. Intel's stock rose about 1 percent.

The Dow Jones industrial average rose 35.70 points, or 0.32 percent, to end at 11,239.55. The Standard & Poor's 500 Index gained 5.63 points, or 0.43 percent, to finish at 1,311.56. The Nasdaq Composite Index climbed 14.39 points, or 0.61 percent, to close at 2,359.75.

Wall Street got a dose of bad news after the closing bell when a New Jersey jury said drug maker Merck & Co, a Dow component, failed to warn two plaintiffs of increased cardiovascular risk with Merck's arthritis medicine Vioxx.

Merck's stock fell 1.9 per cent to $35.32 on the Inet electronic brokerage network from a close at $35.99 on the New York Stock Exchange. Its after-hours decline, and the reason for it, could weigh on the drug sector and on the Dow industrials when trading resumes on Thursday.

A bright spot after hours, though, was provided by home goods retailer Bed Bath & Beyond Inc., which reported earnings that beat expectations. Its shares rose more than 5 percent to $40.25 after the closing bell on Inet from a Nasdaq close at $38.32.

Polishing the Apple

During the regular session, Apple shares surged 9.9 percent, or $6.04, to end at $67.21on Nasdaq.

Apple said it released software to enable Mac computers to run Microsoft Corp's Windows operating system.

"Technology is taking its cue from Apple," said Tim Heekin, director of trading at Thomas Weisel Partners, a San Francisco investment bank.

Microsoft shares gained 0.4 per cent, or 10 cents, to end at $27.74, while Intel shares added nearly 1 per cent, or 18 cents, to $19.48, both in Nasdaq trading.

The Philadelphia Stock Exchange index of semiconductors rose 2.76 per cent.

Providing the biggest lift to the Dow were shares of aluminum producer Alcoa Inc. The stock rose 2.6 percent, or 81 cents, to $31.67 after Credit Suisse raised its price target on Alcoa to $37 from $35.

Alcoa will kick off the quarterly earnings reporting season next week.

OIl sector pumps up, St Jude falls

In the energy sector, ConocoPhillips shares rose 2.2 per cent, or $1.41, to $66.56 and helped lift the S&P 500. Valero Energy rose 4.4 per cent, or $2.64, to $62.50, while Exxon Mobil Corp. gained 0.7 percent, or 41 cents, to $62.16.

US crude oil for May delivery rose 84 cents to settle at $67.07 a barrel, after a report showed a big drop in gasoline supplies in the latest week.

"We continue to use energy, so the demand side of the equation looks very strong," said John Caldwell, chief investment strategist at McDonald Financial Group, part of KeyCorp.

The health-care sector was among the day's weakest. A drop in the shares of heart-device maker St Jude Medical Inc came a day after the company cut its revenue and earnings forecast. The stock fell 12.2 per cent, or $5.05, to $36.25, and was among the biggest drags on the S&P 500 index.

US Treasury Secretary John Snow's comments suggesting strong US payroll figures on Friday revived worries about higher interest rates, limiting the stock market's gains at midday. Snow said he expects US payroll data for March to reflect strength in the economy.

Volume was fairly active on the Big Board, where about 1.61 billion shares changed hands, matching last year's daily average. On Nasdaq, about 2.04 billion shares traded, exceeding last year's daily average of 1.80 billion shares.

Advancers led decliners on the New York Stock Exchange by a ratio of 8 to 5, while on Nasdaq, about six stocks rose for every five that fell.